OLEAN, N.Y. — More projects — and some more jobs — are on the way for the Siemens facility on Paul Clark Drive, officials said, despite sour forecasts in the oil industry and layoffs at other facilities nationwide.
The Dresser-Rand plant in North Olean, currently employing around 800, will see work transferred from other facilities in North America between now and the end of 2019, Siemens officials reported to the Olean Times Herald.
“Siemens’ Olean facility has a long history in Western New York with roots that date back over a century,” said John Stahley, vice president and general manager of U.S. operations. “We are proud to be one of the largest employers in the area and look forward adding to our workforce with good‑paying jobs over the coming months to support anticipated workload.”
Company officials reported that as part of an assessment of facilities and workforce in North America, some additional commercial manufacturing work will be moved to Olean from sites that saw workforce reductions earlier this year. The process will take several steps, they said, with a timetable of 12 to 18 months for completion.
The exact amount of work to be moved has not been determined yet, officials said, and will be based on workload and production schedules at the Olean facility.
Around 800 employees work at the Olean facility, with around 325 members of the United Steelworkers. Of the remainder, around 45 work in research and development. That’s down from around 900 employees and 480 unionized workers in mid-2016.
But those new jobs come at a cost — the work was originally to have been done at other facilities that either closed or scaled back in recent months.
Siemens officials said the Olean facility builds and tests centrifugal compressor products and gas turbines used in oil and gas production, transmission and refining. Two other facilities worldwide perform similar work, with one in Duisburg, Germany, and the other in Le Harve, France. That work — and much of the other work of the Power and Gas division — has been hit hard by lower oil prices, off of all-time highs a decade ago.
According to the corporation’s second quarter report issued May 9, the division saw new orders decrease 16 percent compared to the second quarter of 2017’s fiscal year, while revenues dropped 26 percent. Profits dropped from 438 million euros to 114 million euros, a 74 percent decline.
“Despite continuing strong contribution from the service business, profit is down sharply on lower revenue, price declines, reduced capacity utilization and net negative effects related to project execution,” the report states. “Global energy trends continue to structurally reduce overall demand in markets for the Division’s offerings, resulting in declining new-unit large turbine business and corresponding price pressure due to current overcapacities and aggressive competitive behavior.
“(A)s a consequence, the Division expects substantial severance charges in the second half of the fiscal year,” the report states.
The Dresser-Rand business has a long history in the Southern Tier.
Clark Bros., founded in 1880 in Belmont to build pumps for the explosion in Southern Tier oil development, moved to Olean in 1912. The firm merged with Solomon R. Dresser Co. — originally of Bradford, Pa. — in 1938 to form Dresser-Clark, which was later Dresser Industries. Dresser-Rand was formed in 1986 in a joint venture with Ingersoll Rand, which owned a compressor manufacturing plant in Painted Post. Siemens, a Germany-based energy conglomerate, bought Dresser-Rand in 2015 for $7.8 billion.
Since the purchase, several layoffs have been reported.
In September 2015, Siemens let go of around 25 union workers, with about 50 more laid off through the end of the year. In January 2016, officials announced around 25 non-union workers in Olean were laid off. An additional 25 administrative positions were relocated to other facilities in mid-2017, leaving around 950, Siemens officials reported to the Times Herald at the time.
Unfortunately for the workers at the Wellsville facility, layoffs are now expected to include all workers.
In June 2016, around 60 layoffs were reported at the Wellsville facility, and 96 were let go in January 2017. And this winter, Curtiss-Wright announced it would be buying the division and closing the facility by 2020, leaving hundreds out of work. Following the announcement, politicians from the local, state and federal levels urged Curtiss-Wright to keep the facility open, but were rebuked by the company. U.S. Rep. Tom Reed, R-Corning, worked to add an amendment to the National Defense Authorization Act of 2018 requiring a national security review of changes to moving service and supply lines.
Local officials said they are still trying to help the Wellsville facility, but are also working to encourage Siemens to add more to Olean.
Olean Mayor Bill Aiello said he is encouraged by the news of more jobs for Olean.
“I keep hearing this is one of the best facilities in their lineup,” he said, adding the plant’s unique production in North America adds to the value.
With relatives working at Siemens-owned businesses, Aiello said he has heard “no rumblings” of further cuts.
Without the legal authority to grant tax breaks to keep jobs in Olean, what can the city government do to encourage more growth here?
“Continue to try to grow Olean,” he said, with an improved look to downtown and to neighborhoods to make Olean a better place to work and live.
“We’ll continue to be available to help them with any issues we can,” he added, noting the change in design for the northern end of the Walkable Olean project to accommodate oversized vehicles heading into and out of the Siemens facility. “We can continue working with our state, county and federal officials to keep on top of things.”
He also noted that the city can play a role in information — squashing rumors and keeping people informed as time goes on.
“The Dresser Rand facilities in our region have been major employers for a long time,” said state Sen. Catharine Young, R-Olean. “These jobs have sustained families and been economic drivers for our communities.
“The facility in Olean retains a workforce that is among the largest in the Southern Tier with many operational components that are different from those at the Wellsville plant,” she added. “While Siemens’ global restructuring is not anticipated to impact Olean, we have made it clear to the company leadership that the state is anxious and eager to work with them on a retention project to help boost their operations, profitability and future at the Olean site. We have an ongoing dialogue to that end, which will continue.”
Jason Kaplan, press secretary for U.S. Senate Minority Leader Charles Schumer, D-NY, said the senator “feels that the windfall that Siemens and other large corporations received through a very large corporate tax cut, combined with improving global market conditions and the increase in the price of oil and gas, set the conditions for potential growth rather than retrenchment.
“The senator will be watching like a hawk and will aggressively advocate for Siemens’s world-class workforce at every turn,” Kaplan added.
Government agencies have offered direct financial support in the past, in addition to contracts for work.
In 2009, Dresser-Rand cut the ribbon on a $14.8 million technology center on the campus to focus on research and development. The building, with space for 100 offices and 300 cubicles, was completed with a $2 million grant from Empire State Development. When opened, the building housed around 370 employees — with the company stating it would hire an additional 120 employees for the new building.
(Contact reporter-editor Bob Clark at bclark@oleantimesherald.com. Follow him on Twitter, @OTHBob)
